Business Segments

12 Months Ended

Dec. 31, 2011

Business Segments [Abstract]

Business Segments

16.    Business Segments

The Company's three reportable segments consist of:

• Scholastic—provides services in conjunction with the marketing, sale and production of class rings and an array of graduation products and other scholastic affinity products to students and administrators primarily in high schools, colleges and other post-secondary institutions;

• Memory Book—provides services in conjunction with the publication, marketing, sale and production of school yearbooks, memory books and related products that help people tell their stories and chronicle important events; and

• Marketing and Publishing Services—provides services in conjunction with the development, marketing, sale and production of multi-sensory and interactive advertising sampling systems and packaging, primarily for the fragrance, cosmetic and personal care segments, and provides innovative products and related services to the direct marketing sector. The group also produces book components primarily for the educational and trade publishing segments.

Scholastic

The Scholastic segment provides services in conjunction with the marketing, sale and production of class rings and an array of graduation products, such as caps, gowns, diplomas and announcements, graduation-related accessories and other scholastic affinity products. In the Scholastic segment, we target the school channel and primarily serve U.S. high schools, colleges and universities, marketing and selling products to students and administrators. Jostens relies on a network of independent sales representatives to sell its scholastic products. Jostens provides customer service in the marketing and sale of class rings and certain other graduation products, which often involves a high degree of customization. Jostens also provides ongoing warranty service on its class and affiliation rings. Jostens maintains product-specific tooling as well as a library of school logos and mascots that can be used repeatedly for specific school accounts over time. In addition to its class ring offerings, Jostens also designs, manufactures, markets and sells championship rings for professional sports and affinity rings for a variety of specialty markets. Since the acquisition of Neff, a single source provider of custom award programs and apparel, in March 2007, and the Company's subsequent acquisitions in 2009 and 2010 in the varsity jacket business, we also market, manufacture and sell an array of additional scholastic products, including chenille letters, varsity jackets, mascot mats, plaques and sports apparel in schools and through a dealer network.

Memory Book

Jostens provides services in conjunction with the publication, marketing, sale and production of memory books, and related products that help people tell their stories and chronicle important events. Jostens' strong brand recognition is deeply rooted in its school-by-school relationships and in its consistent ability to deliver high quality products and services and innovate to meet market demands. Jostens primarily services U.S. high schools, colleges, universities, elementary and middle schools. Jostens generates the majority of its revenues from high school accounts. Jostens' independent sales representatives and technical support employees assist students and faculty advisers with the planning and layout of yearbooks, including through the provision of online layout and editorial tools to assist the schools in the publication of the yearbook. With a new class of students each year and periodic faculty advisor turnover, Jostens' independent sales representatives and customer service employees are the main point of continuity for the yearbook production process on a year-to-year basis. Jostens also offers online memory book products and related services, enabling the consumer to create personal, hard or soft-cover memory books to chronicle important events.

Marketing and Publishing Services

The Marketing and Publishing Services segment includes operations in sampling, direct marketing and publishing services. The sampling operations provide services in conjunction with the development, marketing, sale and production of multi-sensory and interactive advertising sampling systems and packaging, primarily for the fragrance, cosmetics and personal care segments. With over a 100-year history, Arcade pioneered the leading ScentStrip^® product in 1980. Since then, we have developed an extensive portfolio of proprietary, patented and patent-pending technologies that can be incorporated into various conventional and on-line marketing programs designed to reach the consumer at home or in-store, including magazine and catalog inserts, remittance envelopes, statement enclosures, blow-ins, direct mail, direct sell and point-of-sale materials and gift-with-purchase/purchase-with-purchase programs. Since the acquisition of Color Optics, a specialty packaging provider, the Company also markets, manufactures and sells highly decorated packaging solutions to the cosmetic and consumer products industries. The direct marketing operations specialize in high-quality, in-line printed products and can accommodate large marketing projects with a wide range of dimensional printed products and in-line finishing production, data processing and mailing services. The products range from conventional direct marketing pieces to integrated offerings with data collection and tracking features. The personalized imaging capabilities can offer individualized messages to each recipient within a geographical area or demographic group for targeted marketing efforts. The publishing services business produces book components, including book covers and jackets, and employs specialized techniques to create highly decorated covers. The Company has long-standing relationships with many customers in this segment, including the world's leading fragrance, beauty and cosmetic purveyors and educational and trade publishers.

The following table presents information of the Company by business segment:

In thousands	2011			2010			2009
Net sales
Scholastic	$	474,667		$	469,730		$	462,718
Memory Book		362,380			375,866			386,848
Marketing and Publishing Services		380,774			395,310			406,032
Inter-segment eliminations		(29	)		(19	)		(273	)
	$	1,217,792		$	1,240,887		$	1,255,325
Operating income
Scholastic	$	34,948		$	25,635		$	45,529
Memory Book		103,137			116,549			105,767
Marketing and Publishing Services		13,792			55,637			50,862
	$	151,877		$	197,821		$	202,158
Interest, net
Scholastic	$	64,071		$	34,812		$	20,837
Memory Book		49,365			27,657			17,638
Marketing and Publishing Services		50,700			28,824			16,814
	$	164,136		$	91,293		$	55,289
Depreciation and Amortization
Scholastic	$	32,627		$	31,879		$	29,198
Memory Book		39,424			39,164			38,989
Marketing and Publishing Services		34,032			33,537			34,358
	$	106,083		$	104,580		$	102,545
Capital expenditures
Scholastic	$	12,440		$	9,831		$	11,099
Memory Book		29,949			22,295			13,633
Marketing and Publishing Services		13,136			18,097			21,406
	$	55,525		$	50,223		$	46,138
Goodwill
Scholastic	$	309,878		$	309,927		$	305,806
Memory Book		391,178			391,614			391,553
Marketing and Publishing Services		282,058			306,958			306,958
	$	983,114		$	1,008,499		$	1,004,317
Intangible assets
Scholastic	$	145,941		$	163,355		$	176,124
Memory Book		168,984			186,706			206,925
Marketing and Publishing Services		133,469			153,748			167,581
	$	448,394		$	503,809		$	550,630
Total assets
Scholastic	$	668,179		$	683,727		$	687,083
Memory Book		749,932			762,240			791,465
Marketing and Publishing Services		626,383			698,008			708,699
	$	2,044,494		$	2,143,975		$	2,187,247

Net sales are reported in the geographic area where the final sales to customers are made, rather than where the transaction originates. No single customer accounted for more than 10% of revenue in any of 2011, 2010 and 2009.

The following table presents net sales by class of similar products and certain geographic information for the Company:

In thousands	2011		2010		2009
Net sales by classes of similar products
Memory book and yearbook products and services	$	362,380	$	375,866	$	386,783
Graduation and affinity products		261,849		261,383		254,458
Class ring and jewelry products		212,818		208,347		208,260
Sampling products and services		174,831		146,757		139,506
Book components		108,784		132,109		154,858
Direct marketing products and services		97,130		116,425		111,460
	$	1,217,792	$	1,240,887	$	1,255,325
Net sales by geographic area
United States	$	1,116,602	$	1,164,100	$	1,186,840
Canada		38,436		33,777		25,053
France		30,925		18,715		13,097
Other		31,829		24,295		30,335
	$	1,217,792	$	1,240,887	$	1,255,325
Net property, plant and equipment and intangible assets by geographic area
United States	$	1,634,369	$	1,719,293	$	1,763,717
Other, primarily Canada		7,189		7,466		2,062
	$	1,641,558	$	1,726,759	$	1,765,779